Joshua Jarvis

Byron Barron with Certapro painters is one of the more dynamic individual at the Chateau Elan Networking Elites BNI group.  We meet every Thursday in Hoschton, GA to grow our business and Byron drives all the way from Dahlonega to see us.

Byron's military background no doubt allows him to be, by far, the most trustworthy painter I've ever had the pleasure of using.  He and his crew will do what they say they will!

Visit Byron online.

In a recent article in the Washington Post, Ken Harney suggests that real estate agents are low balling BPOs to get listings. I won't even address this since the thought of a BPO agent getting a listing from a BPO is pretty silly. There ARE agents who have gotten listings from their BPOs but it was based on how professional and accurate they were and not usually based on them doing something to make the asset manager look like a hero.

In response, Kevin McGrath on Active Rain explains that low ball BPOs are exposed quickly, countering the notion that:

Online, BPOs are hawked to real estate agents as a route to quick profits in a downturn. "This is the easiest and fastest way to make big money in 2009," says one Web site that promises agents "six figures or more" a year. The same site suggests that "bad times put you in the ideal spot" to rack up income by churning out BPOs for lenders.

I'm here to continue the argument. I think low ball BPOs are just what the country needs! In fact, I think that supposed low ball BPOs are saving our economy.

To understand my position, you first have to understand the short sale process and market conditions.

Let's start with the short sale process.

The cliff notes versions is this:

1. Home Owner is Upside Down
2. Home Owner contacts bank and finds out they don't care unless they are behind on their mortgage
3. Home Owner puts home on the market
4. Home Owner has had home on the market for 3 months and decides they might need a short sale agent.
   
5. Agent explains that they need an offer, any offer will do a this point.
   
6. Offer presented is on the verge of being called ridiculous, offer is submitted to the bank.
7. Bank takes the offer and evaluates it.
8. Time Passes
9. More Time Passes
10. Bank assigns a negotiator
11. Time Passes
12. More Time Passes
13. Bank orders a BPO
14. BPO comes in..... and from here the bank bases all of their decisions to counter or except or reject.
    

If the BPO comes in too high?

The offer is rejected, the bank forecloses. Through the process the bank loses additional money but here is where the market comes into play. Since this is a declining market, the home is worth LESS than it was when it hit the market now 6 to 9 months ago. The home may be worth 10% less in some cases maybe more.

However, the BPO agent reads the washington post and has decided to be a hero for the community and over evaluated this home. Surely, this will protect home values!

So now the bank is forced to foreclose and assign this to an agent who couldn't be more removed from the active market if they tried. The agent gets the foreclosure on the market with one photo.

Now the bank has to reduce the price in order to sell the home. In most cases, foreclosure will sell for far less than a short sale would have 6 months prior. Why? When price is the only thing selling the home, and the market is declining and dealing with your bank has become more inconvenient than buying from a regular owner, YOU HAVE TO DISCOUNT IT! (pardon the stream of conscientiousness here).

So the next time you do your BPO, don't low ball, give a true MARKET EVALUATION. This is something that appraisers are NOT trained to do. BPOs SHOULD take into account the market. SO in fact a "low ball" BPO might actually be reality, if you take into account HOW LONG the bank takes!

If you would like to contact Ken Harney about how wrong he is, please do at: KenHarney@earthlink.net.

Josh Whitlock is one of the most dynamic people in the Chateau Elan Networking Elites BNI Group (Now on Linkedin) located in Braselton, GA in the Chateau Elan Area.  Since joining he's made all of us step up our efforts on making fun presentations that actually get a point across.  He's done everything from talk about spider-man underwear to dancing for us... all the while getting his point across that he can make your website stand out - or as he says "We'll make a website that will make you proud, choose the experts at MakeItLoud.

I'm continuing my series of 60 second presentations for many reasons, but one of them is to promote the aweseom members we have at the Chateau Elan Networking Elites Group located in the Chateau Elan area. If you missed it, you can see Tony Woodall with Coffee News here.

This time I'm highlight Taun Henderson (rhymes with "Shawn"), with Compupay - a payroll and servicing company. Taun is an awesome speaker and mentor for our chapter. He has helped me break down networking and teach me how to get and more importantly how to give more out of it.

Taun's famous in this area for his Dr.'s coat, afterall he's the "Payroll Doctor" and of course, his favorite question: "Oh by the way, who does your payroll?"

So without further ado, it's time to "Take your headaches away, choose the experts at CompuPay"